Employer changing fringe benefit to a working condition benefit

[combia1]

I work for a large state university and take graduate level courses. Normally, the U will pay the first $5,250 in tuition and anything above and beyond that is considered additional income so additional income tax is withheld from my paychecks as a result. Since this is considered a fringe benefit, this makes sense.

However, the U has a little-known form they don't like to talk about. You can file paperwork with the U that says your grad school should be consided a working condition benefit. When this is filed, they do not withhold extra income tax for any tuition paid beyond the federal $5,250 cap. A co-worker filed the paperwork at in December and the U even cut her a check for about $10k for all of the extra withholding for the past year! Does this make sense?

Here is my question. I did not know about this paperwork so I could not file for 2006 and 2007 with the U - I have done it for 2008 though. But the U can not retroactively "refund" that extra withholding so in essence I had about $20K extra withheld the past two years that I will never see. Can I push the U to give this back? Can I file an amended tax return?

This issue will impact thousands of employees at the U who also take classes.

 

[xylene]

Can I push the U to give this back?

No. The tax withheld was paid to the federal government.

Can I file an amended tax return?

You have a right to file an ammended return as a taxpayer. I am not conviced by the evidence you provide that this is justified or will result in tax savings.

You really should to consult with a tax professional if you choose to do so.

This issue will impact thousands of employees at the U who also take classes.

Unlikely. Employers are under no requirement to treat tax situations homogeneously.

Also, I disagree with your logic. Why would the school not want you to know about a tax situation that also benefits them as well?